Michigan taxes paid by flow-through entities

[user17712074123]

I'm using turbotax online premium and have a K-1 that lists Michigan State income taxes paid by a flow-through entity, and Michigan State refund from a flow-through entity.  There is no place to enter these for 2025.  I'm pretty sure this was available in 2024.  If I look at the "Deduction for Taxes Smart Worksheet" it has a line called "Share of Michigan income tax paid by flow-through entities (Not supported)".  There is a similar "(Not supported)" line in the "State and Local Tax Refunds Smart Worksheet".  Will there be an update soon to support these?  Is there any other way I can fill these values in?

[PatriciaV]

We have confirmed experience you have seen. It would be helpful to have a TurboTax ".tax2025" file that is experiencing this issue for further investigation.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, please follow these instructions: 

In TurboTax Online, open your return, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. You may wish to snap a screenshot to post instead of the actual number.
6. Reply to this thread with your Token number (including the dash) and tag (@) the Expert requesting the token from you.
7. Please include any States that are part of your return - this is VERY important.

If you are using TurboTax for Desktop, go to Online in the top menu, then choose "Send Tax File to Agent."

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

[user17720731878]

I can also confirm this issue. I have entered flow though withholding for the past several years with no issue, but it does not currently exist. You need to correct and update our software.

[PatriciaV]

Please follow the instructions provided previously and submit a screenshot of your token for a diagnostic copy. We need this in order to research the issue and possibly submit to development for investigation.

@user17712074123 

@user17720731878 

[user17712074123]

@PatriciaV  I've sent my document file.  Token number:  1334818

[user17712074123]

*diagnostic file

[user17720731878]

Still cannot enter Michigan Flow through withholding tax for Desktop version. I sent token 693674280-90653936. This problem has never occurred in the past. Previous years I entered under Michigan Tax. See attached picture of last years screen.

[PatriciaV]

Yes, you can enter MI tax withheld from a flow-through entity that was reported to you.

1. Open your return and navigate to Wages & Income >> Deductions & Credits >> Estimates and Other Taxes Paid >> Estimates >> State estimated taxes for 20XX.
2. Add another payment.
3. Choose Michigan from the drop-down, enter the date paid, and the amount.
4. Continue to view the confirmation page, then click Done.

This entry will be reported on the MI Tax Payments Worksheet under Tax Payments for the Current Year and flow to Form MI-1040 Line 32.

Although this work-around omits the K-1 reporting, you will report the state tax paid on your behalf to reduce your state tax liability (if any).

@user17712074123 

@user17720731878 

[edited 3/2/2026 | 7:34 am PT]

[user17720731878]

There was no question or field entry on the Desktop version for the K1 entry needed for Flow-though withholding.  In years past it was not in the K1 questioning either, however, it was listed on the STATE section for taxes paid.

[user17712074123]

Correct.  Income taxes deducted on flow-through entity's federal tax return also needs to be entered or my state taxes will not be calculated correctly.  In addition, the workaround for state taxes paid by flow-through entity has the following issues:

     1)  By entering the state tax payments as estimated tax payments, it populates the amount on line 32 of the MI-1040 rather than line 30.

     2)  I do not know the date these taxes were paid since this isn't reported on a K-1

     3)  By reporting the payment as estimated taxes, I end up with an underpayment penalty that I would not get for a flow-through entity payment

[PatriciaV]

We have reported this experience to our team for further investigation. When a determination is made, we'll post any additional information to this thread.

@user17720731878 

@user17712074123

[user17712074123]

Adding to my previous post regarding entering taxes paid by a flow-through entity as if they are estimated taxes that were paid to the state of michigan:  I also noticed that if you are itemizing on your federal taxes, they get deducted from your federal return as additional state taxes paid.  This is also incorrect since the flow-through entity has already deducted them on federal taxes.  Those state taxes would effectively be deducted from federal taxes twice.